Developer sought for land in heart of Hilltop business district

Staff writerDecember 5, 2013 

A vacant lot in the heart of Tacoma’s Hilltop business district is up for grabs for a developer who has the right plan and the right price.

The city of Tacoma issued a request for proposals Wednesday for almost the entire block between South 10th and 11th streets on Martin Luther King Jr. Way. It set a minimum purchase price of $920,000 and a submittal deadline of Jan. 14.

“That site is catalytic for the neighborhood,” said Justin Leighton, a neighborhood activist who recently led a group working on a long-term planning effort for the Hilltop. “We want a project to accomplish a couple of things: retail on the ground floor and housing” above that.

“We don’t want it to sit empty anymore,” Leighton said.

Development will bring more feet to the street and continue the increased vibrancy in the corridor, already the site of well-known Tacoma businesses, including the Johnson Candy Co. Community Health Care’s new facility recently opened just a block away, and another developer has proposed renovating other historic buildings nearby. The neighborhood also will see 200 new trees planted, courtesy of an anonymous donor.

The six parcels comprising almost 1.5 acres is owned by the state of Washington. Most of it is vacant, but the single building on the property can be adapted or demolished, according to documents. Zoning in that area allows buildings up to seven or eight stories if certain conditions are met, though other plans for that area have proposed heights between four and six stories.

The state has delegated the selection process to the city for its local expertise.

“Not only are we local and available for regular meetings at the site, we can be more focused on what the end use will be,” said Patricia Beard, a project manager with the city’s economic development department.

The state took over ownership of the land earlier this year from the Martin Luther King Housing Development Authority. In 2007, it planned to build a mixed-use retail, office and housing development. It received a $4 million state grant.

The project didn’t happen. MLKHDA blamed the recession. But nearly half of the state money was misspent, according to a state review in 2009, the same year the group fired two of its executives.

Since the state took on the land, it has spent just under $1 million to get the property ready for development, including paying back taxes, vendors and doing environmental cleanup.

The request for proposals (RFP) set a minimum bid of $920,000. Under the terms of the state’s agreement with the city, $916,000 of that will go to the state. No more than $50,000 beyond that will go to the city of Tacoma for the cost of the RFP and any development agreement. If the purchase price is higher than $966,000, the city and state will split the remainder.

The city is getting an updated appraisal now, officials said. A state spokeswoman said one completed just a few years ago during the depressed economy showed the land to be worth around $1 million.

Developers should submit a “transit-oriented plan,” according to documents, given that the parcels is on the route of the planned expansion of light rail. Any approved project will have to be ready for occupancy within two years after the property is sold to the developer. Land-banking, or speculative buying, is forbidden.

“We’re really optimistic things will work out,” said Penny Thomas, spokeswoman for the state Department of Commerce. Developers have been approaching the state about the property since this summer, she said.

Kathleen Cooper: 253-597-8546 kathleen.cooper@ thenewstribune.com Twitter: @KCooperTNT

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